The Company Law Board (CLB) on Thursday rejected the government’s plea to supersede the boards of Maytas Infrastructure and Maytas Properties as was done in the case of the fraud-hit Satyam Computer Services, but allowed the government to have a majority representation on the board of Maytas Infrastructure.
Both Satyam and Maytas Infra are listed companies founded by the family of disgraced and ousted Satyam chairman B. Ramalinga Raju.
The government has been allowed to appoint four nominee directors on the company board, one of whom would be the chairman.
The government would also be allowed to appoint one nominee director on the board of Maytas Properties. The director would also be part of the required quorum of its board meetings and all board decisions would require his affirmative vote.
“The arrangement allows government control in the conduct of affairs of the two companies without compromising with the imperative of revamping the management of these two companies,” Corporate Affairs Minister P. C. Gupta told reporters.
He added that this was an interim arrangement and if the government wants, it can move a similar plea in the near future.
The government has already appointed corporate lawyer O.P Vaish and former Institute of Chartered Accountants of India president Ved Jain on the company’s board. “The other two directors including the chairman would be appointed soon,” the minister said.
Jain will also serve as a director on the Maytas Properties board.
The government had charged the managements of both the firms with “fraud” and “breach of trust.”
It said the move was aimed at preventing further acts of fraud and to safeguard the operations of these companies.
The CLB has said the Maytas Infra board will not be allowed to pass any decisions or hold meetings without the presence of at least two government nominees in its meetings.